Sunday, June 15, 2008

Clever and deceptive: API's new ads

The high price of oil has given birth to a thousand solutions. They include such fantasies such as running cars on water and perpetual motion machines. And, they include sensible ideas for quickly cutting the consumption of oil and moving to electricity to power most of our transportation fleet. The American Petroleum Institute (API), the oil and gas industry's lobbying arm, has its own proposals, of course, and not surprisingly they include opening up protected public lands and U. S. coastal areas to drilling.

That API's ideas might be more appropriately grouped with fantasy solutions is illustrated by the organization's own recent television advertising campaign. The campaign includes four separate ads. Two of the ads offer a defense of oil industry profits. One touts the broad ownership of oil company shares by pension funds and implies that viewers' pensions might very well be benefitting from the superb financial performance of the energy industry. The other ad suggests that oil companies really don't make that much money when compared to other industries in America. This would presumably make oil companies poor investments for one's pension fund. But no matter, to avoid confusion the two commercials are probably never scheduled to run back to back.

The remaining two spots deal with the energy crisis. In one a professionally-dressed woman tells us that "we have substantial oil and natural gas resources right here," as she walks across a map of the lower 48 states. "Enough to power 60 million cars and heat 160 million households for 60 years," she continues. The reason for her optimism is that "with advanced technology and smart policies, together we can secure America's energy future."

It's hard to put footnotes into a 30-second spot though API had no trouble footnoting the U. S. Energy Information Agency and the International Energy Agency when it wanted to make the point that 45 percent more oil and gas will be needed by 2030. Let me propose some of my own footnotes. Here is the full text of the ad with my footnotes added below:

Oil and natural gas powered the past. But the future? Fact is a growing world will require more, 45 percent more by 2030 along with greatly expanding alternatives. We have substantial oil and natural gas resources1 right here [NARRATOR STROLLS OVER MAP OF THE LOWER 48 STATES].2 Enough to power 60 million cars3 and heat 160 million households for 60 years.4 With advanced technology and smart policies,5 together we can secure America's energy future.6 Log on to learn more.

(1) Only of fraction of those oil and natural gas resources are ever likely to be recovered for both economic and technical reasons. There is no guarantee that those that we do recover will come out at the rate we want them to.

(2) Includes all offshore areas such as Cape Cod, Hilton Head, Miami Beach, the Gulf of Mexico and the California, Oregon and Washington coasts. Also included are all wilderness areas of Alaska (not pictured).

(3) 60 million cars sounds like a lot, but that represents only a fraction of the more than 250 million highway vehicles currently registered in the United States.

(4) The "60 years" claim is theoretical (and perhaps mere fantasy). See footnote 1. Also, powering cars and heating homes assumes that the highest and best use of oil and natural gas is to burn them notwithstanding their high value as feedstocks for thousands of chemicals and others products that are critical to the modern world.

(5) "Smart policies" is shorthand for opening up all public lands and offshore areas in the United States to drilling.

(6) This doesn't mean energy independence. The U. S. will still be importing more than half its oil by 2030 according to the U. S. Energy Information Administration. We won't really be secure.

In fact, by suggesting that domestic oil resources could power 60 million cars, API is admitting that energy independence is a false hope even as they confuse viewers with the notion that we Americans will be more secure.

Of course, if all my footnotes were required, say, in the manner of warning messages included in prescription drug ads, viewers might be just as queasy about API's plan for America's energy future as they ought to be about some of the drugs they see advertised on television.

What might make viewers even more queasy is a second API ad which claims that we get two-thirds of our oil and natural gas from North America. This is a rough but reasonable estimate of the heat value of the oil and natural gas combined. But, once again we find ourselves watching API's spokeswoman walking across a map of the lower 48 states as she delivers her message. Perhaps Canada and Mexico from whom we import significant quantities natural gas and oil are too large to represent on the map. Or perhaps it would be a little impolitic to treat Canadian and Mexican oil and natural gas as if it belonged to the United States. Better to leave both countries off the map and hope that nobody notices. People might begin to think inconvenient thoughts such as, "Why should the Canadians and the Mexicans simply sell us all the oil and natural gas we want? Maybe they'll need it for themselves. Oh, and by the way, didn't I hear that Mexico's oil production is declining and Canada's natural gas production is flat?"

Those who ignore the borders between Canada and the United States and the United States and Mexico must not like the inconvenient facts of sovereignty. Jerome a Paris, writing on The Oil Drum: Europe put it this way in a recent article:

One is to think that political obstacles are minor, i.e., that it will be easy to force Russia or Saudi Arabia (or Venezuela or Iran or even U.S. politicians) to open their door or the spigot. This perpetuates the narrative that other countries [on] the planet are here to provide us with the necessary goods or services, independently of their own priorities or needs; it conveys that their sovereignty is a fiction that we tolerate with just a bit too much patience, but that we could push out of the way if it really became necessary.

Two years ago some readers balked at my idea that the United States and Canada could enter a period of bitter tension (although probably not open conflict) as energy resources, especially natural gas, become scarce in North America. But can such an idea be far from the mark when API is telling us that we can get whatever energy resources we want from Canada and Mexico?

One of the most important facts which API omits from its television ads, but does mention obliquely in a policy piece on its website is that the vast majority of the resources to which they refer are "undiscovered." The group isn't even talking about known deposits waiting to be assessed for their potential. API states that "federal lands hold an estimated 656 trillion cubic feet of recoverable natural gas" and "an estimated 112 billion barrels of recoverable oil." This probably refers to what the government calls technically recoverable. Rocks from the Moon are technically recoverable, but they are very expensive and difficult to get. And so, none of this tells us whether this undiscovered, technically recoverable oil and gas will ever be found and tapped.

There is likely to be some economically recoverable oil and natural gas on federal lands. But is it wise to make public policy on such an important issue as energy based on estimates of oil and natural gas that have yet to be discovered? The Bakken Formation in North Dakota, Montana and Saskatchewan has been touted as having 3 to 4 billion barrels of technically recoverable oil reserves. But it seems doubtful that we will ever get that much oil out of it. And, even if we did, it is worth remembering that at the current rate of consumption, these barrels would last the world somewhere between 36 and 48 days (12 days for each billion barrels).

In this environment of high oil and natural gas prices, those who have a vested interest in drilling will naturally lobby for the right to do so. This really shouldn't strike anyone as strange. What we should not do is base our energy policy on the outlandish pronouncements of industry players about the success they expect.

2 comments:

Nice work, Kurt. The massive PR campaigns only just beginning by groups like the API will greatly challenge those who want to help the public understand our energy challenges - not profit from them. This piece is a good example of how to demonstrate the outrageous claims of the energy industry.